A federal judge in Chicago had dismissed a class action in another US case that looked at the performance right in sound recordings made before 1972, and which are not covered by federal copyright law.
In his June 5th ruling, Judge John J. Tharp Jr. sided with defendants iHeartMedia in the action brought by Arthur and Barbara Sheridan, who own own the copyrights in a number of pre-February 15th 1972 master recordings The Sheridans said they and other copyright holders should be entitled to royalties when iHeartMedia played their sound recordings in radio and internet broadcasts and the Sheridans claimed that the defendants had infringed their Illinois state law copyright infringement, and claimed unfair competition, conversion and unjust enrichment. Defendant iHeartMedia argued the Plaintiffs failed to state any viable claim.
In the 1950s and 50s the Sheridans owned and operated “several recording companies specializing in recording and selling doo-wop, jazz, and rhythm and blues music” including artists like the Flamingos, J.B. Lenoir and the Moonglows. In addition to owning audio masters, they also assert ownership of “intellectual property and contract rights associated with the recordings” which they continue to market to receive “revenue from licenses granted to third parties to publicly perform the recordings.” The Sheridans argued that iHeartMedia has not obtained any licenses to use their sound recordings on iHeartRadio, which includes hundreds of traditional AM and FM radio stations, as well as online streaming software and services. The case was brought as a class action in the federal court on the grounds the class included residents of multiple states, had more than 100 members and more than $5 million was claimed.
For Judge Tharp, the primary issue on copyright was whether Illinois provides copyright protection to pre-1972 recordings sold to the public without licenses for public performance. And to this question the court had a simple answer – in Illinois, publication “extinguishes the common law copyright”. Judge Tharp explained “Both the Illinois Supreme Court and the Seventh Circuit, however, have construed the concept of dedication to the public to include acts by which members of the public could access copies of the work — particularly through sales,” Tharp said.
The judge also explained the difference between the copyright in sound recordings and the copyright in the musical compositions they are recordings of saying: “By selling such recordings, the Sheridans did not, and could not, divest the compositions of their copyright protection. But they could, and did, divest the recordings of performances of those compositions of common law copyright protection by selling those recordings to the public.”
Tharp also dismissed the unfair competition claim, noting Illinois law technically addresses piracy, the “creation and sale of physical unlawful copies of sound recordings.” The Sheridans did not allege iHeartMedia stole the music it plays, only that it engaged in broadcasting, for which state law has codified exemptions. He said the claim “is premised on the unfairness of acknowledging the settled expectations of virtually an entire industry” and therefore provides no cause of action under Illinois law.
The Judge found that the “conversion claim fails to clear the first hurdle” by failing to assert a property right that precludes public performance: llinois law applies conversion claims only to tangible rights.
Judge Tharp also agreed with iHeartMedia when it argued the unjust enrichment claim failed because it was derivative of the common law copyright claim which had failed.
Judge Tharp dismissed all claims saying “the dismissal is based on the incurable lack of any state law cause of action, rather than curable pleading deficiencies, the dismissal is with prejudice.”